Penalty For Hiding Assets During A Divorce
Although penalties for hiding assets during a divorce vary state-to-state (and even case-to-case), regardless of where you complete the divorce, you are still going to be in flagrant contempt of the courts. If during discovery, it is discovered that you have intentionally concealed financial information or assets with intent to prevent the other party from receiving his share, judges have a pretty good range of options to sanction penalties for hiding assets in a divorce. While it is understandably tempting, particularly if you believe that your ex-spouse would benefit more than you, ultimately hiding assets in divorce is unlawful and puts you at risk for severe penalties. When it seems like your ex is going to do a lot better than you on a property settlement, you may feel the temptation to hide assets from the courts and your spouse in order to avoid having them divided in the divorce.
If you simply do not disclose assets or give financial disclosures to your spouse in divorce, a court may order you to do so. If you cannot prove your exs failed disclosure of any assets prior to finalizing a divorce, for example, if he failed to disclose a piece of marital property that you do not have any claim on, a court still has the authority to order your ex to pay sanctions, since California law does not require you to suffer actual harm from your exs failed disclosure. In addition to receiving 50-100% of an asset, in addition to potentially being awarded attorney fees and costs, you may ask the court to sanction your ex for failing to disclose a hidden asset(s) throughout your divorce proceedings.
Depending on the size of the hidden assets, a judge can penalize the spouse that withheld assets by granting the other spouse a share of the hidden assets, or the entire amount. The judge may impose penalties and order the spouse found to have hidden assets to pay the others attorney’s fees. In certain circumstances, such as fraud or deliberate failure to disclose, a court may award all assets to the other spouse.
A spouse who conceals assets is guilty of perjury in front of the court, may be subject to significant prison sentences for this offense, and could end up with a felony conviction. Civil penalties for perjury in divorce cases: If a court finds that one spouse has hidden assets, he may be ordered to pay damages to the other spouse for any attorney’s fees or costs they have had in investigating his finances. If a judge finds someone has been deliberately violating the laws regarding disclosure of assets, then a judge can compel them to pay their ex-spouses attorney’s fees and court costs.
Because your judge is free to make pretty much whatever rulings they wish, as long as they stay within the boundaries of the states divorce laws, you are going to get slapped with statutory penalties for being dishonest or concealing assets. If your spouse has sold marital property for less than it was worth, not only are they potentially concealing assets, but they may be violating the law. Divorce lawyers are trained to find every effort at hiding marital assets in a discovery, so it is likely that they will discover your hidden assets, and that you will get caught.
Divorce lawyers are experts at detecting any efforts made to hide assets, which means that you are probably not going to get away with hiding. A lying spouse does not simply get away with it if he or she can conceal assets long enough to get to a divorce judgment. If an ex-spouse learns of hidden assets after the divorce is finalized, he or she may file a post-judgment motion under California Family Code Section 2556, asking the court to enter a judgment regarding the missing assets, with penalties on the line.